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HomeMy WebLinkAbout1991-03-26 - AGENDA REPORTS - FRANCHISE SC WATER COMPANY (2)a AGENDA REPORT City Manager Xpprova Items to be presente Andrea Daroca PUBLIC REARING DATE: March 26, 1991 Subject: Ordinance of the City of Santa Clarity Granting A Franchise to Santa Clarity Water Company. Ordinance 91-13 Department: FinanceR _BACKGROUND The County Franchise ordinance for Santa Clarita Water Company, adopted by the City of Santa Clarita by reference, has expired. Santa Clarita Water Company has filed an application with the City of Santa Clarita requesting that Council grant them a franchise to continue their operations within the City limits. After several meetings between staff and Santa Clarita Water Company, negotiations have concluded and both parties are in agreement over the final modifications to Ordinance 91-13. The proposed ordinance calls for a franchise term of ten (10) years with an optional renewal provision for fifteen (15) additional years. Such a renewal process will consist of an even greater review of the ordinance and may involve possible amendments to the ordinance if deemed necessary at the time of renewal. The length of the franchise term does not in any way diminish the flexibility of the City to terminate the franchise at any time for the purpose of assuming the operations of the water purveyors. The proposed ordinance allows for the Council and City staff to have greater review capacity over the operation of the water companies without restricting or burdening the business operations of the water companies and their ability to service the residents of this community. Along with its annual payment of 2% of gross receipts, a one time franchise granting fee of $10,000 will be paid to the City of Santa Clarita by the franchisee. At the end of each calender year, the franchisee will submit a report to the City Council which will include dicussion of consumer complaints, if any, together with a description of the franchisee's overall operations within the City. That City Council open the public hearing, waive further reading and pass to second reading on April 9, 1991. ATTACHMENTS: + Ordinance 91-13al Ag�li�a, Item: _ PUBLIC HEARING PROCEDURE 1. Mayor Opens Hearing a. States Purpose of Hearing 2. City Clerk Reports on Hearing Notice 3. Staff Report (City Manager) or (City Attorney) or (RP Staff) 4. Proponent Argument (30 minutes) S. Opponent Argument (30 minutes) 6. Five-minute Rebuttal (Proponent) a. Proponent 7. Mayor Closes Public Testimony 8. Discussion by Council 9. Council Decision 10. Mayor Announces Decision c 0 WPX/DPB/ORD920309 ORDINANCE NO. 91-13 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, GRANTING A FRANCHISE TO SANTA CLARITA WATER COMPANY The City Council of the City of Santa Clarita does hereby ordain -as follows: Section 1. Thee right, privilege and franchise is granted to Santa Clarita Water Company, its successors and assigns to lay or construct from timetotime and for the period of ten (10) years to maintain, operate, repair, renew, change the size of, remove or abandon in place pipes and pipelines for the transportation and.distribution of water, waste water, mud, steam and other liquid substances, except any hazardous substances within the meaning of the "Comprehensive Environmental Response Compensation and Liability Act of 198011, the "Federal Pollution Water Control Act", and the "Solid Waste Disposal Act", together with all manholes, valves, appurtenances and service connections necessary or convenient for the operation of said pipes and . pipelines, including poles, conduits, wires, cables and other appurtenances and equipment for telegraph or telephone lines or both, necessary or convenient for the Franchisee's business in, under, along -or across those portions of the streets, roads, and highways now or hereafter dedicated to public use in the City of.Santa Clarita, State of California. r1 L_J Franchisee shall have the right to renew the franchise for one additional.(15) year period by providing written notice to the City at any during the 12 month period preceding the end of the original ten (10) year period. Upon renewal of the franchise, the City and the Franchisee.shall review the past operation of the franchise and make such changes to the franchise as the parties may mutually agree. Franchisor and Franchisee agree to act in good faith in negotiating any changes to the franchise at the time of ,renewal. Notwithstanding the above, the City shall not impose an additional granting or renewal fee upon renewal of the franchisee. Section 2. As consideration for the franchise granted, the Franchisee shall pay to the City in lawful money of -the United States the following: -1- WPX/DPB/ORD920309 A. Two percent (2%) of the gross annual receiptsofthe Franchisee arising from the use, operation or possession of the franchise; provided, however, that such payment shall in no event be less than one percent (1%) of the gross annual receipts of the Franchisee derived from the sales within the franchise area(s) of the commodity or service for which the franchise is awarded. Such percentage shall be paid annually during the life of the franchise, including the year of granting the franchise. In the event this amount is increased by Federal or State Law or the City of Santa Clarita is otherwise empowered to increase the rate, the city reserves the right to increase the rate up to the maximum amount permitted by Federal, State or local law. Payments shall be due for the period commencing with the effective date without deferral. The annual payments under this paragraph 2A shall be prorated for the calendar years in which this franchise begins and is terminated based upon the period of time the franchise has been in effect during those years. B. In addition to the foregoing annual payments, the Franchisee shall: 1. Pay the City Director of Finance, . within sixty (60) days .after the end of each calendar year, for each year during the life.of the franchise, an initial construction charge calculated at a rate of Two Hundred Dollars ($200.00) per mile or fraction thereof for all new mains.laid during the preceding year. E 2. Pay the City Director of Finance, within sixty (60) days after the end of each calendar year, for each year during the life of the franchise, an annual fee of Fifty Dollars ($50.00) per pole mile or portion thereof, and Fifty Dollars ($50.00) per mile or portion thereof of underground conduit for telephone or telegraph lines maintained under the franchise. 3. Pay the City Director of Finance, within thirty (30) days of the effective date of this ordinance, a one time granting fee of $10,000. 4. Upon demand, reimburse the City for its cost in administrating the Franchise. Reimbursement shall include, but not be limited to, such items as the cost of inspecting Franchisee's books and records, in order to determine the correct reporting of revenues to the City. The reimbursement fee shall not exceed $1,000 per calendar year. -2- WPX/DPB/ORD920309 • The City shall have the right annually to inspect the books and records of the Franchisee for the purpose of verifying the accuracy of the fees.paid to the City under this Section 2. Such inspections shall take place during normal business hours and following at least 5 working days written notice from City to Franchisee. Section 3. The Franchisee shall: A. File with the City Director of Finance, within sixty (60) days after the expiration of the calendar year, or fractional calendar year, following, the date of the granting of the franchise and within sixty (60) days after the expiration of each -calendar year thereafter, two copies of a report verifiedbythe oath of the Franchisee or by the oath of a duly authorized representative of the Franchisee showing the total gross receipts of the Franchisee for the immediately preceding franchise payment period, received or accrued in connection with the furnishing.of the commodity or service arising from the use or operation of the franchise,.together with such data as is necessary in the opinion of the Revenue Collector to calculate or verify the calculation of the annual payment required by Section 2-A, supra (or the pro rata amount thereof, for the first period if the first period is less than one year). . B. On this report the Franchisee shall also show any change in franchise footage since the last franchise report, segregating such footage as to new mains laid, old mains removed, old mains abandoned in place, and the footage of mains in territory annexed or incorporated since the last franchise report. 0 C. File with the City Director of Public Works, within sixty (60) days after the end of the calendar year, a report, in duplicate, showing the permit number of each permit obtained for the installation of new mains during the immediately preceding franchise report period, together with the length and size of said mains. D. File with the City Director of Public Works a report of customer complaints and disposition thereof on an annual basis. Section 4. A. The Franchisee during the life of the franchise shall make the annual payments to the City, as provided in Sections 2 and 3, supra, within sixty (60) days after the end of each calendar year. In the event the -3- �J WPX/DPB/ORD920309 Franchisee fails to make any payments for the franchise on or before the dates due as hereinabove provided, Franchisee shall pay as additional consideration the following amount: ten percent (10%) of the amount due. Said amount has been set by both parties hereto in recognition of the difficulty in affixing actual damages arising from a breach of said time and performance requirements. B. For each period of late payment of.any rate, payment or fee, including the ten percent (10%) late charge, extending beyond thirty (30) days of the due date, an assessment of interest shall accrue at one and one-half percent (1 1/2%) per month. Section 5. Franchisee shall meet the following indemnification, insurance and bonding requirements: A. Franchisee agrees to indemnify, defend and save harmless City, its agents, officers and employees from and against any and all liability, expense, including defense costs and legal fees, and claims for damages of any nature whatsoever, including, but not limited to, bodily injury, death, personal injury, or property damage, including property of the Franchisee, arising from or connected with Franchisee's operations, or its services hereunder, including any Workers' Compensation suits, liability or expense, arising from or connected with services performed on behalf of Franchisee by any person pursuant to this franchise. B. Without limiting Franchisee's indemnifi- cation of City, Franchiseeshall provide and maintain at its own expense during the term of this franchise the programs of insurance covering its.operations hereunder set forth hereinbelow. Such insurance shall be provided by insurer(s) satisfactory to City and evidence of such programs satisfac- tory thereto shall be delivered to City Director of Finance, on or before the effective date of this franchise; provided, however, that any insurer admitted to issue insurance in the state of California that has a B -X rating or higher by Best Key Rating Guide shall be deemed satisfactory to the City. Insurance policies and certificates evidencing coverage shall name the City of Santa Clarita, its officers, agents, and employees.as additional insureds with respect to Franchisee's operations under the franchise. Such evidence shall specifically identify this franchise and shall contain express conditions that City is to be given written notice by registered mail at least sixty (60) days in advance of any modification or termination of any program of insurance. The required coverage is as follows: -4- WPX/DPB/ORD920309 1. Liability: Such insurance shall be primary to and not contributing with any other insurance maintained.by City, shall name the City of Santa Clarita as an additional insured, and shall include, but not be limited to: (a) Comprehensive General Liability Insurance endorsed for Premises - Operations, Products Completed Operations, Pollution Liability, Contractual, Broad Form Property Damage and Personal Injury with a combined single limit of not less than One Million Dollars ($1,000,000) per occurrence. If the above insurance is written on a claims made form, Franchisee shall provide the City with sufficient evidence to establish that Franchisee will be able to pay all claims that are reported to Franchisee during the two (2) years following the termination date of the subject policy. If the Franchisee reasonable concludes that the premium for the Pollution or other Liability coverage portion of the above described insurance is unreasonably expensive in light of the coverage provided, the City agrees to consider reasonable alternatives to obtaining such Liability coverage, including allowing the Franchisee to self -insure for this coverage. (b) Comprehensive Auto Liability insurance endorsed for all owned, non -owned, and hired vehicles with a combined single limit of at least One Million Dollars ($1,000,000) per occurrence. 2. Workers' Compensation: A program of Workers' Compensation insurance in an amount and form to meet all applicable requirements of -the Labor Code of the State of California, including Employers Liability with a $150,000 limit, covering all persons providing services on behalf of franchisee and all risks to such persons under this franchise. If applicable, such insurance shall also provide for every benefit and payment under obligation of the Federal U.S. Longshoreman and Harbor Worker Compensation Act, paying particular attention to Public Law 92.572. In lieu of the policy of Workers' Compensation Insurance required in this Section, Franchisee may substitute and provide a certificate of consent to self-insurance, issued by the Director of Industrial Relations of the State of California. C. Franchisee shall furnish City Director of Finance within thirty (30) days of the adoption of this Ordinance granting the franchise, either certified copies of such policies or a certificate of insurance for each of the 0 -5- 0 WPX/DPB/ORD920309 required policies executed by the company issuing the policy, certifying that the policy is in force. D. 1. Within thirty (30) days of the adoption of this ordinance granting the franchise, Franchisee shall provide, to the City Director of Finance, a faithful performance bond in the sum of not less than Fifty Thousand Dollars ($50,000), payable to the City of Santa Clarita and executed by a corporate surety licensed to transact business as a surety in the State of California. Such bond shall be conditioned upon the faithful performance by the Franchisee of the terms and conditions of the franchise and shall provide that, in case of any breach of condition, the whole amount of the penal sum shall be deemed to be liquidated damages and shall be payable.to the City by the principal and sureties of the bond. 2. The faithful performance bond shall continue to exist for one (1) year following the City Council's approval of any sale, transfer, assignment or other change of ownership of the franchise, or of the expiration of termination of franchise. The City Council may release said bond prior to the end of the one (1) year period upon satisfaction by Franchiseeofall the obligations under the franchise. 3. At its.sole option, the City may accept Certificates of Deposit, Cash Deposits, or U.S. Government Securities in lieu of commercial bonds to meet above bonding requirements. Such alternative bonds shall be made payable.to the City and shall be deposited with the City Director of Finance. E. The types and amounts of said insurance coverages and bond shall be subject to review and reasonable adjustment by the City, at City's sole discretion, which shall not be unreasonably exercised, at any time during the term of the franchise. In the event of such adjustment, Franchisee agrees to renew required -insurance coverages and bonds, in types and amount(s) as determined by the City, within thirty (30) days after written notice to do so from the City. F. Failure on the part of the Franchisee to procure.or.maintain required insurance and bonding shall constitute a material breach of this franchise upon which the.City may immediately terminate or suspend this franchise. Mfl WPX/DPB/ORD920309 • G. The obligation of providing evidence of current insurance policies and bonding shall be on the Franchisee. Section 6. A. The Franchisee shall not sell, transfer, assign, lease, hypothecate, place in trust or change the control of the franchise or any part thereof, except with the prior consent of the City Council, and after payment of a transfer fee as detailed in subsection F, infra except as excluded in Subsection E. As used in this section, "transfer" includes stock transfer and "control" includes actual working control in whatever manner exercised. B. Franchisee shall inform the City Council of any pending sale; transfer, lease, assignment, hypothecation, placing in trust or change in control of the Franchise, except as excluded in subsection E, and shall provide all documents on which the sale, transfer, assignment, lease, hypothecation,.trust or change in control is predicated. C. Franchisee shall provide the City Council with written notice of any pending sale, transfer, lease, • assignment, hypothecation, placing in trust or change in control of the Franchisee, as required hereunder, at least 60 days prior to the closing of the proposed transaction and shall provide the City Council with all relevant documents and information requested by it regarding the proposed transaction. 0 D. As a condition to the granting of consent to such sale, transfer, assignment, lease, hypothecation, trust or change in control, the City Council may impose such additional terms and conditions upon the franchise and upon the grantee or assignee which the City Council deems to be in the public interest. Such additional terms and conditions shall be expressed by ordinance. Nothing herein contained shall be construed to grant the Franchisee the right to sell, transfer, assign, lease, hypothecate, place in trust or change control of the franchise or any part thereof, except in the manner aforesaid. This section applies to any assignment, whether by operation or by law, by voluntary act of the Franchisee, or otherwise. E. Shareholders and/or partners of the Franchisee may transfer, sell, exchange, assign or divest themselves of any interest they may have therein. However, in the event any such sale, transfer, exchange, assignment, -7- WPX/DPB/ORD920309 • divestment or other change is effected in such a way as to give control of or twenty-five percent (25x) or more interest in the franchisee to any persons, corporation, partnership or legal entity other than the controlling interest therein or the effective date of the franchise or the effective date of the last assignment, sale, transfer or other action which required the City Council's consent,. consent thereof shall be required. Notwithstanding anything to the contrary contained in this Section 6, no consent of the City. Council shall be required for any assignment or transfer of the franchise by the Franchisee to an affiliate. For purposes of this Agreement the term "affiliate" shall mean any person or entity that, directly or indirectly, controls or is under common control with Franchisee. The proposed transferee (assignee) of the franchise shall provide the City all information and documents that it mayconsider relevant and necessary for its review of the proposed transaction and the capability of the proposed transferee to operate and maintain the franchise. F. The transfer fee shall be submitted with the applicant's request for the City's consent to any action described in Subsection A, supra, and shall be determined as • follows: 1. Consent to sale, transfer, transfer of stock, assignment or lease, or any other action not requiring modification of the franchise by adoption of an amending ordinance: $2,000. • 2. Consent to sale, transfer, transfer of stock, assignment or lease,. or any other action requiring modification of the franchise by adoption of an amending ordinance: $5,000. 3. In the event the costs to process the application exceed the fees detailed above, the applicant may be required to pay any additional costs incurred by the City in processing the applicant's request for consent to sale, transfer, transfer or stock, assignment, lease, hypothecations or trust of franchise. Such costs may include the costs incurred for hiring consultants to assist in evaluating the application. Such costs shall be paid by the applicant prior to final consideration of the request by the City Council. Section 7. In the event the Franchisee receives notice to relocate its pipelines and appurtenances pursuant -8- WPX/DPB/ORD920309 to the Santa Clarita Municipal Code or other applicable ordinance, and the Franchisee neglects or fails to relocate its facilities -in a.timely manner after receipt of any such notice, Franchisee shall be responsible for and shall reimburse the City, for any and all additional costs or expenses incurred by the City, due to or resulting from such delay in relocation of the facilities. Section S. In addition to the terms and conditions herein, this franchise is granted under the same terms and conditions contained in the Santa Clarita Municipal Code relating to Basic Franchises, including the prerequisite set forth in Santa Clarita Municipal Code § 4.04.340 that the Franchisee obtain excavation permits pursuant to theHighway Permit Ordinance prior to excavation work on any public right of way. Franchisee shall use its best efforts to avoid excavating any portion of a.highway that Franchisee has excavated within two years of a prior excavation, except to conduct emergency work, as defined in the Basic Franchise Ordinance. In the event the terms and conditions hereof conflict with the terms and conditions of the Santa Clarita Municipal Code, the terms and conditions hereof shall control. Section 9. Concurrent with the remission of fees as required under Section 2, the Franchisee shall submit a brief written report to the City Council regarding the operation of the franchise during the preceding 12 -month period. Such report will include a discussion of consumer complaints, if any, received by the Franchisee, together with a general description of the Franchisee's overall operations within the City, and such other matters as the City or Franchisee deem appropriate to discuss. If requested, Franchisee will make an oral report to the City Council at a public meeting. Such report shall include water quality test results during the prior twelve (12) months. 0 . -9- WPX/DPB/ORD920309 iSection 10. The effective date of this franchise shall be February 3, 1991. 19 . ATTEST: 11 0 PASSED AND APPROVED.this day of CITY CLERK -10- Met WPX/DPB/ORD920309 • STATE OF CALIFORNIA ) COUNTY OF LOS -ANGELES ) ss. CITY OF SANTA CLARITA 1 I, , City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Ordinance No. was regularly introduced and placed upon its first reading at a regular meeting of the City Council on the day of , 19 That thereafter, said Ordinance was duly adopted and passed at a regular meeting of the'City Council on the day of , 19_, by the following vote, to wit: AYES: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: 0 L.J -11- CITY CLERK RESOLUTION 10. 91-34 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, DECLARING ITS INTENTION TO GRANT A WATER FRANCHISE TO SANTA CLARITA WATER COMPANY WHEREAS, Santa Clarita Water Company, a California corporation, has filed with the City Council of the City of Santa Clarita, an 'application requesting that a franchise be granted to it of the character and for the purpose mentioned in the form of notice hereinafter set forth; and WHEREAS, in the opinion of the City Council the public good requires that the franchise be granted; and NOW, THEREFORE, BE IT RESOLVED that the City Council intends to grant the franchise, that hearing .of objections to the granting the franchise will be held at the time and place specified in the form of notice set forth within this Resolution which the City Clerk is hereby directed to publish at least once in the Newhall Signal, or other lawful notice, and to post in three (3) public places in the city, within fifteen (15) days after the passage of this Resolution, and that the notice shall be substantially in the following words and figures: "NOTICE OF INTENTION TO GRANT FRANCHISE" NOTICE IS HEREBY GIVEN that Santa Clarita Water Company, a California corporation, has filed its application with the City Council of the City of Santa Clarita, requesting that the City Council grant to it a franchise for a period of ten (10) years with a renewal provision of fifteen (15) additional years, pursuant to the Franchise Act of 1937, to use and to construct and use, for transmitting and distributing water for any and all purposes, pipelines, wires, conduits and appurtenances, including communication circuits necessary or proper therefore, in, along, across, upon, over -and under the public streets, ways, alleys and places within the City of Santa Clarita. If the franchise shall be granted to it, the Santa Clarita Water Company, its successors and assigns, (hereinafter designated "grantee") during the life of said franchise will pay to the city two percent (2X) of the gross annual receipts of the grantee arising from the use, operation, or possession of the franchise; provided, however, that such payment shall in no event be less than one percent (1%) of the gross annual receipts derived by grantee from the sale of electricity within the limits of the city. Such percentage shall be paid annually from the date of the granting of the franchise applied for, and in the event such payment shall not be made, the franchise shall be forfeited. The City Council of the City of Santa Clarita proposes to grant the franchise for a period of ten (10) years with a renewal provision of fifteen (15) additional years. J Resolution 91-34 Page 2 NOTICE IS HEREBY -FURTHER GIVER that any and all persons having any objections to the granting of the franchise may appear before the City Council at City Hall, 23920 Valencia Blvd., Santa Clarita, California, 91355, at the hour of 6:30 p.m. on Tuesday, the 26th day of March, 1991, and be heard thereon; and NOTICE IS HEREBY FURTHER GIVEN that at any time not later than the hour set for hearing objections, any person interested may make written protest stating objections against the granting of the franchise; such protest must be signed by the protestant and be delivered to the City Clerk of the city. The City Council, at the time set for hearing objections, shall proceed to hear and pass upon all protests so made; and For further particulars, reference is hereby made to the.Application of the Santa Clarita Water Company which is on file in the office of -the City Clerk, and also to the Resolution adopted by the City Council on the 26th day - of February, 1991, declaring its intention to grant the franchise. PASSED, APPROVED, AND ADOPTED this 26th day of February 1991. (,a.,�� /� MAYOR M. GRINDEY; City Clerk I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita,. at a regular meeting thereof, held on the 26th day of Fgbn= , 1991, by the following vote of the Council: AYES: COUNCILMEMBERS: Darcy, Heidt,.Klajic, McKeon, Boyer NOES: COUNCILMEMBERS= None ABSENT: COUNCILMEMBERS: None za DONNA GRINDEY, ity Clerk